CanDo SA Is Analyzing a Proposed Project

question 19

Multiple Choice

CanDo SA is analyzing a proposed project.The company expects to sell 12,000 units,give or take 4%.The expected variable cost per unit is €7 and the expected fixed cost is €36,000.The fixed and variable cost estimates are considered accurate within a plus or minus 6% range.The depreciation expense is €30,000.The tax rate is 34%.The sale price is estimated at €14 a unit,give or take 5%.The company bases its sensitivity analysis on the expected case scenario.What is the earnings before interest and taxes under the optimistic case scenario?

• A)€22,694.40
• B)€24,854.40
• C)€37,497.60
• D)€52,694.40
• E)€67,947.60

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Definitions:

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